In­vestors are told to put their trust in firms reg­u­lated by the City watch­dog. But this is just half the story, Laura Miller finds

Three men wait at the bar. One is so drunk he can barely stand, but he’s propped up by his friend, who in turn leans on the third man, who is sober. Staff are told not to serve drunks but the bar­man can’t tell who to cut off be­cause the three are hold­ing each other up­right. All are obliged. Soon af­ter, the drunk­est suf­fers a nasty fall. The en­su­ing chaos costs the bar­man his job.

Thou­sands of Bri­tish in­vestors are back­ing shaky in­vest­ment schemes on a sim­i­lar mi­rage of sta­bil­ity. Re­as­sured by the in­volve­ment of le­git­i­mate Uk-based com­pa­nies, they end up robbed of mil­lions and their fi­nan­cial se­cu­rity.

Al­most all firms of­fer­ing fi­nan­cial ser­vices in Bri­tain must be au­tho­rised by the Fi­nan­cial Con­duct Au­thor­ity and play by its rules, but high-risk investments of­ten in­volve mul­ti­ple com­pa­nies in dif­fer­ent coun­tries.

If some­thing goes wrong, un­rav­el­ling who is cul­pa­ble for your loss is labyrinthine. Each com­pany will only ad­dress re­spon­si­bil­ity for its small part of the trans­ac­tion, push­ing in­vestors from pil­lar to post in search of their money.

In­vestors in over­seas schemes are par­tic­u­larly vul­ner­a­ble to this. The shadi­est com­pa­nies will take no re­spon­si­bil­ity and chas­ing your losses from thou­sands of miles away can be gru­elling.

One re­tired cou­ple, both for­mer teach­ers, told that they lost a grand to­tal of £345,000 in four dif­fer­ent schemes this way, 86pc of their in­vest­ment.

Mr Richards, not his real name, said: “We worked for 40 years, never took hol­i­days and in our spare time ren­o­vated our house. We sold it and when the £400,000 came through we wanted to in­vest for our re­tire­ment in line with our moral com­pass.”

In 2016 the cou­ple saw an in­ter­net ad­vert that led them to Bar Works, a scheme that tapped the trend for free­lanc­ing by rent­ing desks in